You will be surprised when you read this. Something so simple as knowing the Thai Labour law inside out. You would expect that from HR, right?
But here's the sad news: the unexpected truth of the matter. During the last 15 years of interviewing HR managers, I have personally experienced that 80% of the candidates could not answer three basic labour law questions correctly.
"Don't shoot the messenger" comes to mind. But I hope my critique will be taken in the right spirit and most importantly encourage the HR community to adhere to lifelong learning, to improve the HR profession by always being up-to-date, and to take pride in being the professional advisor to the management and colleagues.
No Sir and Ma'am, lifelong learning is not about how you live a long life (as too many managers conveniently think) – lifelong learning is about how you must never and never stop learning. Be curious, you must subscribe to free e-newsletters, read books, attend seminars, be proud of your functional expertise, and become the go-to-person for everyone else in your organisation and industry.
Lifelong learning is the ongoing, voluntary, and self-motivated pursuit of knowledge for professional and personal reasons.
Becoming a Manager is not the end of your career and where you now have the right to lean back, to relax and enjoy that you reached the top. In fact, the promotion to Manager is the start and first day of the rest of your career. It's time to show everyone that you deserved the promotion or appointment; and that happens by leading from the front and by example.
Test your Labour Law knowledge
- What does the Labour Law say about probation period?
- What is the notice period to terminate an employee?
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How do you terminate an employee during probation?
Answer to 1: The short answer is: nothing!
Imagine your boss is hiring a new manager he knows from a previous company where they worked together; your boss does not want to include a probation period in the employment agreement. He is now asking if you can issue an employment agreement without probation and still be in compliance with the Labour Law. What's your answer?
Many candidates I have interviewed, and asked what the Labour Law says about probation, start talking about severance payments, that after 120 days a company must pay one month pay in compensation; after one year's employment a compensation of three months' pay. And you know the rest.
But the provision in Section 118 in the Labour Law is only about severance pay and not about probation period. Severance and probation are two different concepts.
- The correct answer: Probation is not mentioned in the Labour Law.
- The longer answer: There is no requirement by law to include probation in your employment agreement. It's totally at your own discretion to decide if you want to.
But perhaps you are now thinking, why is it then customary in many companies to have a probation period of 119 days? The reason is to avoid paying an employee a severance payment, if the employee has worked for 120 days or more, and is terminated without cause.
Answer to 2: What is the notice period to terminate an employment?
If your answer is 30 days, you are wrong!
Section 17 of the Labour Protection Act requires the company to terminate an employee, even termination during the probation period, with a notice at or before payment of wage and salary, in order for the termination to take effect the following payday.
The notice from one payday to the next payday is called one-payment-cycle or one-pay-period's notice.
The employer may also choose to deliver a notice of termination with immediate effect, provided that payment of wages in lieu of notice is simultaneously made to the employee.
There are several exceptions to the rule of giving advance notice. You are allowed to dismiss an employee with immediate effect for very specific reasons listed in Section 119 of the Labour Protection Act and actually also in Section 583 of the Civil and Commercial Code. Here are three of them, in short: dishonest performance of duties; intentionally causing loss to the company; and violation of work regulations if warnings have been given.
Generally speaking, employers can always provide better terms and conditions for their employees than what is required by the Labour Law. Please note, even if the employee has signed the employment agreement, where the terms of employment are not in compliance with the Labour Law, such employment agreement may be deemed invalid and may not be enforceable in court.
Answer to 3: How do you terminate an employee during probation?
The short answer: See my answer above to Question 2!
The longer answer: Section 17 of the Labour Protection Act requires the company to terminate an employee, including termination during the probation period, with a notice on or before payday, in order for the termination to take effect the following payday.
The Labour Law does not mention the term probation period. So no matter how many hours, days, months, or years the employee has worked for you, and no matter whether you have set your own probation period in the employment agreement, the notice requirement for terminating an employee without cause is always at least one payment cycle in advance of the effective date of termination (in short called "one pay period's notice").
In other words, to terminate an employee without cause, the employer must provide one pay period's notice or make payment of wage in lieu thereof. There is no difference in giving notice to an employee who has worked just weeks or months compared to someone who has worked many years for your company.
Disclaimer: The information presented in this article is not legal advice, and should not be acted on as such. It's prepared for general information purposes only. You should not act upon any such information without first seeking qualified professional
The content of this article has been checked by Ms. Pimvimol (June) Vipamaneerut, Partner at Tilleke & Gibbins International; Thailand's oldest and largest independent law firm.
Author: Tom Sorensen is a Partner at Boyden Thailand, a global Top 10 executive search firm. Contact tsorensen@boyden.com and learn more on www.boyden.co.th
Series Editor: Christopher F. Bruton, Executive Director of Dataconsult Ltd, chris@dataconsult.co.th. Dataconsult's Thailand Regional Forum provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.